Airbus to renegotiate A400M delivery and capability timelines

Gareth Jennings, London - IHS Jane's Defence Weekly

08 February 2018

Airbus has signed a declaration of intent (DOI) with the partner nations to renegotiate the delivery schedule and timeline for the further rollout of the military capabilities of the A400M transport aircraft.

The A400M seen just ahead of its maiden flight in December 2009. About eight years later and Airbus is having to renegotiate its delivery and capability contracts in the face of punishing penalty payments. (IHS Markit/Gareth Jennings)

Under the DOI, which was announced by Airbus on 7 February, the manufacturer agrees with the European defence agency OCCAR and the seven partner nations to work on several contractual elements including a revamped delivery plan as well as a roadmap for the further development and completion of military capabilities for the A400M.

“The DOI, finalised [on the same day as the announcement], represents an important step towards reaching a contractually binding agreement with OCCAR and the launch customer nations in 2018 to mitigate risks and to ensure the future of the programme,” Airbus said in a statement, adding that it “provides a new baseline on which to evaluate the A400M contract”.

This development follows a February 2017 appeal made by Airbus to OCCAR and the partner nations of Belgium, France, Germany, Luxemburg, Spain, Turkey, and United Kingdom to renegotiate aspects of the A400M contract that were costing it billions of Euros per year in penalties. The company’s CEO Tom Enders said during a financial results briefing at the time that the A400M programme was proving to be “painful”, and that it was becoming “a significant financial burden” on the group.

Enders attributed many of the problems affecting the programme to a deal with OCCAR and the partner nations that was “too short on budget and too short on timeline”, adding that Airbus’ acceptance to take on liability for development of the EuroProp International (EPI) TP400-D6 turboprop engine was “an incredible blunder”.

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